ISLAMABAD: Finance Minister Muhammad Aurangzeb on Wednesday said that tax on the agriculture sector would come into force from July 1, 2025, under the National Fiscal Pact (NFP) with provinces and hoped to sign a memorandum of understanding (MoU) shortly with China on talks for reprofiling of energy sector debt.
Speaking to journalists after a meeting of the Senate Standing Committee on Finance, the finance minister said that discussions with provinces over the NFP were progressing well and uniform legislation for tax on agriculture income would be introduced by January that would become effective for collection from July 1, 2025.
Responding to a question on energy debt reprofiling with China, the minister said the talks were progressing, and the two sides expected to sign an MoU soon “to continue talks”. His statement put to rest some media speculations that the two sides were ready to sign reprofiled debt agreements during the visit of Chinese Prime Minister Li Qiang to Pakistan next week.
The minister had previously stated that Pakistan had formally sought written requests for energy sector debt reprofiling given heavy capacity payments, resulting in unaffordable energy rates and piling up of circular debt. This has now required detailed talks with Chinese financial institutions and investors on a project-to-project basis to finalise revised term sheets, mainly relating to lengthening the existing front-loaded debt repayment period in 10 years.
In a rare appearance before a parliamentary panel, the outgoing country director of the Asian Development Bank, Yong Ye, briefed the Senate panel on Pakistan-based operations.
He informed that the Manila-based lending agency would be providing $8.4bn to Pakistan over the next four years, including $2.005bn this year, followed by $1.855bn in FY25, $2.3bn in FY26 and $2.25bn in FY27.